Growing demand for data centers in Silicon Valley

The Bay Area home market may be in a slump, and vacant office buildings and storefronts can be found all over. But there's one sector of real estate that's booming -- the market for data centers.

Data centers are huge computing facilities that store documents, process online transactions, send and receive e-mail and deliver videos and music to your iPad or iPod. The demand for data centers is growing fast.
In the city of Santa Clara, municipally owned Silicon Valley Power estimates the expansion of data centers will increase demand for electricity by 30 percent over the next two to three years. That means it will have to meet an increased demand of 150 megawatts, or enough power to service 150,000 homes.
Data centers are expensive to operate. They are run 24 hours a day, seven days a week, and require cooling to keep rows and rows of data processors from overheating.
Brocade, a San Jose company that helps companies create data centers to run their businesses, says the annual energy bill for its own 5,000-square foot data center is $7 million. However, it shaved $1.5 million off its operating expenses by recently consolidating three data centers into one and utilizing a host of new energy-saving technology.
Energy efficiency is very much on the mind of companies as they build and expand data centers, not only to cut costs, but also to reduce carbon emissions.
The Silicon Valley Leadership Group sponsored a summit to enable companies to share best practices with each other.
Ray Pfeifer, senior vice president at SynapSense, says until recently, data center operators wouldn't share the ways in which they running their facilities more efficiently for competitive reasons. But today, eBay and others were on hand to show others what they're doing.
Pfeifer says the Environmental Protection Agency has been keeping an eye on data centers, and Silicon Valley companies are trying now to take a proactive stance to improve their carbon footprint and energy use to avoid future regulation.
Companies are also getting a helping hand from developers, such as Digital Realty Trust, which can locate, plan and build data center space with energy efficiency in mind.
Digital Realty is taking older buildings or sometimes constructing new ones to help meet the demand for more data centers.